THE TJX COMPANIES, INC. INC. COMPANIES, TJX THE 2018 ANNUAL REPORT REPORT ANNUAL 2018 35557 Cover CC2019 copy.indd 1 2018 ANNUAL REPORT 2018 INC. COMPANIES, THE TJX ALL ABOUT 4/16/19 4:33 PM VALUE CONSOLIDATED PERFORMANCE SUCCEEDING IN MANY TYPES OF ENVIRONMENTS STEADY EARNINGS GROWTH 1 42 7 2.50 DOLLARS 36 6 | 2.00 30 5 1.50 24 4 18 3 $ BILLIONS | 1.00 $ BILLIONS | 12 2 0.50 6 1 NET SALES SEGMENT PROFIT 0 0 ADJUSTED DILUTED0.00 EARNINGS PER SHARE ( ) 19 (FY)82* 83* 91* 02* 09*10* 19 FY 15 16 17 18 *Recession GLOBAL STORE GROWTH POTENTIAL REINVESTING IN OUR BUSINESS, CURRENT COUNTRIES, CURRENT CONCEPTS RETURNING VALUE TO SHAREHOLDERS 7,000 4,500 6,000 4,000 3,500 5,000 3,000 4,000 2,500 3,000 2,000 1,500 2,000 1,000 1,000 500 NUMBER OF STORES 0 $ MILLIONS 0 Marmaxx HomeGoods TJ X TJ X Total (FY) 15 19 15 19 15 19 (U.S.) & Homesense Canada International TJ X 3 (U.S.) 2 (Europe and Net Cash Property Share Repurchases Australia) from Operating Additions Activities Dividend Payments Store Count FYE19 Long-Term Potential 1 FY15 adjusted EPS of $1.58 excludes the negative impact of a second quarter debt extinguishment charge of $.01 per share from GAAP EPS of $1.57. FY17 adjusted EPS of $1.77 excludes the negative impact of $.04 per share from a debt extinguishment charge and a pension settlement charge from GAAP EPS of $1.73. FY18 adjusted EPS of $1.93 excludes a $0.09 per share net benet due to items related to the 2017 Tax Act (primarily due to the deferred tax liability reduction and lower corporate tax rate, net of Associate bonuses, retirement plan contributions, and contributions to charitable foundations), an estimated $0.06 per share benet from the 53rd week, and a $0.05 per share impairment charge related to Sierra from GAAP EPS of $2.02. FY19 adjusted EPS of $2.11 excludes a $0.34 per share net benet due to items related to the 2017 Tax Act (primarily due to a lower corporate tax rate), and a $0.02 per share pension settlement charge from GAAP EPS of $2.43. 2Long-term potential includes 1,000 HomeGoods and 400 Homesense stores. 3FYE19 total store count includes 35 Sierra stores. 35557 Cover CC2019 copy.indd 2 4/16/19 4:33 PM TO OUR FELLOW SHAREHOLDERS: We delivered another year of excellent performance and building our internal teams, infrastructure, and in 2018, following many successful years over our 42- supply chain. We see the depth of our global expertise year history! For the 52-week year, we reached $39 as a major advantage as we pursue our growth billion in sales, which is more than double our sales strategies around the world. Long term, we see the a decade ago and a 9% increase over the 53-week potential to grow TJX by approximately 1,800 stores period in the prior year. We signicantly exceeded to about 6,100 total stores. This growth reects the our comparable store sales plan, delivering a 6% potential we see with just our current chains in just increase over the prior year’s 2% growth. We were our current countries alone. In 2019, we expect to most pleased that each of our four major divisions, open approximately 230 net new stores, which would Marmaxx, HomeGoods, TJX Canada, and TJX bring our year-end total to more than 4,500 stores and International, drove strong represent about 5% store growth. comparable sales growth for 23 the year driven by signicant At MARMAXX, sales surpassed $24 billion in 2018! We STRAIGHT customer trafc increases. achieved an outstanding 7% comparable store sales We are convinced we grew increase, led by customer trafc gains. Marmaxx drove YEARS OF our market share in the these results with a comp store base that averages COMP U.S., Canada, Europe, and 20 years in age, which is a remarkable reection of INCREASES Australia as our great values the fundamental strength and continued consumer and treasure-hunt shopping appeal of our largest division. We were particularly experience continue to appeal to consumers around pleased with the excellent performance within both the world. In our history as a Company, we have had our apparel and home categories, and the consistency an annual comparable store sales decline in only one we saw across our regions. We are convinced that year! Further, 2018 marks our 23rd consecutive year Marmaxx continues to have a long runway for growth. of annual comparable store sales increases and We are pursuing many initiatives to keep driving our 22nd straight year of dividend increases. shoppers to our stores and investing in our growth by expanding our distribution capacity. Long term, as Net income rose to $3.1 billion in 2018 and adjusted we ll in existing markets and expand further into rural earnings per share were $2.11 for the year, increasing and exurban markets that have been so successful 9% over the prior year’s adjusted $1.93 and exceeding for us, we see the potential to grow Marmaxx to 3,000 our expectations.1 Our long track record of consistent T.J. Maxx and Marshalls stores, combined. growth speaks to the power of our exible business model and our decades of off-price experience In 2018, the HOMEGOODS division delivered a 4% across our global organization. Overall, we grew comparable store sales increase while opening 94 total square footage by 4%, adding a net total of 236 more stores, including 12 Homesense stores, our stores, including expanding our newer businesses, second U.S. home concept launched in 2017. Homesense and Sierra in the U.S., and T.K. Maxx in Our customers are loving Homesense, which we Australia. We ended the scal year with 4,306 stores differentiate from HomeGoods, primarily with the and are proud of our store growth, particularly in merchandise assortment, to drive trafc to both retail another year of thousands of retail store closings. We banners. While we are by far the largest off-price, also made important investments in our distribution home fashions retailer in the U.S., the addressable capabilities and systems to support our growth plans. home fashions market in the U.S. is vast. We see an We were extremely proud to employ approximately enormous opportunity to grow both HomeGoods and 270,000 Associates worldwide at year end. Homesense in this country, to approximately 1,000 HomeGoods and 400 Homesense stores. To support FOUR POWERFUL DIVISIONS our rapid growth, we are making important investments We operate four powerful divisions, each with great in our distribution network over at least the next couple growth potential. All of our major divisions have more of years to increase our capacity. We are excited about than two decades of operating expertise—developing the potential we see to keep bringing our eclectic home vendor relationships and regional consumer knowledge, assortments to more new markets and consumers! 1 35557 4P Insert CC2019.indd 1 4/9/19 4:47 PM TJX CANADA, which includes Winners, HomeSense, KEY STRENGTHS GIVING US CONFIDENCE and Marshalls, had another terric year, driving 4% TJX is the largest off-price retailer of apparel and home comparable store sales growth. We are proud to be fashions worldwide! We have enormous condence Canada’s only major off-price apparel and home in our continued successful growth around the world. fashions retailer! We have built a very loyal customer We operate an extremely exible business model following in this country. Our loyalty program in that has allowed us to navigate through many kinds Canada, called TJXStyle+, continues its strong of economic and retail environments. Over our 40- momentum and is another way for us to engage with plus years, we have driven steady sales and earnings shoppers and encourage more frequent visits and growth while opening thousands of stores around the cross shopping. We are condent that signicant world. In a retail environment that is changing rapidly opportunity remains to grow this division throughout and with the growth of e-commerce in general, we Canada, and believe we will grow this division to 600 see TJX in a position of strength. We believe the stores across our three chains. depth of our off-price knowledge and expertise in the U.S. and internationally is unmatched. Our key TJX INTERNATIONAL, which includes T.K. Maxx advantages, which differentiate us from so many and Homesense and spans six European countries and other retailers, are major reasons we have great Australia, delivered signicantly improved performance condence in our Company. in 2018. Total sales surpassed $5 billion and comparable store sales grew 3%, despite the challenging retail First and foremost, we are all about value, which landscape in Europe. In the U.K., we feel very good has been at the core of our Company from the start. about the fact that the gap between our comp sales More than low prices, we deliver value through a and that of other major U.K. brick-and-mortar retailers combination of brand, fashion, price, and quality. continued to widen in 2018 as we pursued opportunities Importantly, we offer great values on comparable to capture additional market share. We also took merchandise versus regular prices at both full advantage of opportunities to open new vendor doors price brick-and-mortar and major online retailers. throughout Europe to bring shoppers even more The overall growth of e-commerce in today’s retail selections of branded merchandise.